Annual Report 2015 BUILDING THE BIGGER...
Transcript of Annual Report 2015 BUILDING THE BIGGER...
Destia in brief ...............................................2
DESTIA’S YEAR 2015Key figures ....................................................3Destia’s key events 2015 ..............................4President and CEO’s review .........................5Destia’s business operations ........................7Strategy and targets .....................................9Operating environment ...............................11Destia and the opportunities created by megatrends ................................................12
CORPORATE RESPONSIBILITYDestia and corporate responsibility ............13Profitable business .....................................15Production of services ................................16Customer satisfaction ................................17Safety .........................................................18Skilled and thriving Destia personnel .........20Procurement and partnerships ...................22Environment ...............................................23New solutions and sector development .....24Social participation and communications ..26
GRI content index 2015 .............................27
CONTENTS
ANNUAL REPORT 2015 1
Destia is a Finnish service company in the infrastructure and construction sector. We build, maintain and design not only traffic routes, railways and traffic and industrial environments but also complete living environments. Our services cover subterranean construction, extensive overground operations and energy and engineering construc-tion.
Destia is a company of experts, where people enjoy a supportive atmosphere and the greatest opportunities in the infrastruc-ture sector to make use of and develop their competence. With our diverse expertise, we create the conditions for safe and smooth traffic, building the bigger picture, piece by piece.
Our customers include government organisa-tions, cities and towns, industrial companies and commercial enterprises. Our extensive network of offices guarantees that we are close to the customer all over Finland. In 2015, Destia Group’s revenue was MEUR 462.8 and the number of personnel on aver-age 1,505.
DESTIA – BUILDING THE BIGGER PICTURE
READ MOREWe built the Kettumäki bridge in Hämeenlinna.
ANNUAL REPORT 2015 2
KEY FIGURES
REVENUE AND ORDER BOOK INCREASED AS COMPETITION INTENSIFIED
KEY FIGURES (IFRS), EUR Million
Destia Group 2015
Destia Group 2014*
Destia subgroup 2014
Revenue 462.8 261.8 431.5
Operating profit 12.9 12.5 15.1
% of revenue 2.8 4.8 3.5
Result for the reporting period 6.7 5.5 10.5
% of revenue 1.5 2.1 2.4
Return on investment, % 9.4 9.2 20.9
Earnings per share, EUR 56.14 53.77
Equity ratio, % 31.2 29.4 34.3
Net gearing, % 32.6 42.4 -41.2
Average personnel 1,505 1,502 1,502
Accidents resulting in absence ** 7.6 9.3 9.3
Order book at the end of reporting period 717.4 628.2 628.2
* Established on 1 July 2014** Accidents per one million working hours
The difficult situation with the Finnish econo-my continued to weaken the operating envi-ronment of the entire construction sector and also affected Destia’s development. Competi-tion in the sector is fierce and the level of prices quoted low. As a result of growth in maintenance and construction volumes, our revenue, however, increased. Our order book also developed positively. In accordance with our strategy, we have succeeded in increas-ing the share of private sector orders in our order book, both in terms of numbers and revenue. This demonstrates the success of our efforts to develop of our customer and sales work.
ANNUAL REPORT 2015 3
DESTIA’S KEY EVENTS 2015JANUARY20/1 Start of the Young Talent develop-
ment programme targeted at tal-ented young Destia employees
29/1 Topping-out ceremony for the Western Metro RU13 project contracted by Destia
FEBRUARY2/2 To continue the positive develop-
ment of workplace safety, monthly 15-minute site safety meetings covering all project personnel were initiated
3/2 Agreement concluded for the maintenance of the Northern Fin-land track-network maintenance area 12
4/2 Destia selected to build the Hami-na access roads and the Sivatti pedestrian and bicycle path for the E18 Hamina bypass contract
24/2 Destia selected to upgrade Nation-al Road 8 to a motorway at Nousi-ainen
MARCH3/3 The Reposaari bridge contracted
by Destia was highly commended in the 2015 Bridge of the Year competition
23/3 Chosen to carry out the renovation of the dam at the Imatra hydro-electric power plant
APRIL1/4 Earthworks began in the Kala-
satama centre2/4 Commitment to the Responsible
Summer Job campaign and the employment of about 150 trainees and summer workers in summer 2015
8/4 Winning the competitive tendering contract for municipal technology in Varkaus
10/4 Winning the competitive tendering contract for the track maintenance area 8 (Ylä-Savo)
24/4 Winning six multi-year contracts in the competitive tendering for re-gional highway maintenance con-tracts: Sodankylä, Lapua, Puolan-ka, Kemijärvi–Posio, Parkano and Porvoo
27/4 Signed a contract to build an over-taking lane on National Road 3 at Hämeenkyrö
MAY18/5 Work started on a National Road 8
upgrading contract at Luostarinkylä in Rauma
22/5 Agreement signed for an upgrad-ing contract of Main Road 77 at Viitasaari
JUNE1/6 Start of construction work to up-
grade Main Road 148 in Kerava3/6 Contract concluded for super-
structure work between Eskola and Ylivieska
8/6 Bridge repair contract begun in Northern Savonia
17/6 65 MEUR bond to institutional in-vestors was listed on the Helsinki Stock Exchange maintained by Nasdaq Helsinki Oy
26/6 Destia wins the cable installations for Suvilahti−Viikinmäki in Helsinki
26/6 Winning the competitive tendering for the alliance contract at Helsinki Airport
JULY1/7 Earthworks begun for a natural gas
distribution pipeline between Tahkoluoto and Kaanaa
2/7 Destia wins construction work of a new bioproduct mill to be built in Äänekoski
3/7 Surface structures for the Vantaa Housing Fair area completed
16/7 Finland’s largest events park in Hämeenlinna, built by Destia, prepared for its first events
17/7 Contract concluded for the con-struction of the Patokangas raw wood terminal
AUGUST28/8 Destia selected as the main con-
tractor for the first development stage of KymiRing, the motorsport centre to be built in Iitti
SEPTEMBER11/9 Maintenance contract for E18
Koskenkylä–Kotka won by Destia25/9 The best dissertations honoured in
Destia’s annual infrastructure-field dissertation competition
OCTOBER8/10 The E18 Hamina bypass fully com-
pleted29/10 Completion of an overpass built by
Destia celebrated in Mikkeli; the overpass is part of the National Road 5 contract in Mikkeli
NOVEMBER23/11 Destia sells its measuring, drilling
and laboratory services to Mitta Oy
DECEMBER21/12 Third contract victory for prelimi-
nary work at the Hanhikivi1 nuclear power plant project in Pyhäjoki: earthworks for the reactor building
31/12 Asset deal between Destia and Mitta Oy:n concluded
4ANNUAL REPORT 2015
PRESIDENT AND CEO’S REVIEW
A MODERATE YEAR IN A CHALLENGING MARKET SITUATIONDestia's success in 2015 was moderate despite a challenging operating environment. As a result of the poor economy, demand in the infrastructure sector remained on rather a low level, which was evident in the fierce competition for projects. In spite of the chal-lenging market situation, our revenue and or-der book increased. Our operating profit fell slightly short of the previous year. During the year, individual unsuccessful projects weak-ened our result in comparison with the previ-ous year.
In accordance with our strategy, we fo-cused on strengthening our core businesses and on growth in selected business areas. Large road projects requiring special exper-tise and infrastructure maintenance consti-tute our core business.
Railway construction and maintenance, and rock and energy infrastructure construc-tion are our key areas of growth. In 2015, we succeeded in strengthening our position in these areas. In the railway business, we have achieved a major intermediate goal, as half of Finland’s railway network maintenance is carried out by Destia.
At the end of the year, we divested our measurement, drilling and laboratory servic-es in order to clarify our business portfolio. The sale of these businesses also strength-ened our balance sheet and created better conditions for developing and growing our core operations. As a result of the trans-action, our professionals in measurement, drilling and laboratory services gained better opportunity to develop under new owner-ship, specialising in these services.
Road weather conditions are monitored in real- time at Destia’s winter maintenance management centre, Kelikeskus, and the information is trans-mitted to the maintenance crew. Keli keskus oper-ators, supervisors and drivers are in contact with each other by means of mobile solutions.
KELIKESKUS GUIDES MAINTENANCE
READ MOREDestia's winter maintenance
ANNUAL REPORT 2015 5
We also improved our customer work and sales work. Our share of private customers increased both in terms of numbers and rev-enue. Destia’s order book at the end of last year was bigger than the previous year and is spread over more years than previously. Our order book together with the development of our customer and sales work provide a good foundation for 2016.
OCCUPATIONAL SAFETY AT THE BEST LEVEL EVERIn order to achieve our strategic objectives, we continued to invest in human resource development. We focused on expertise, cus-tomer work and occupational safety. We also determinedly advanced our internship pro-grammes. Increasingly, we have been able to hire new employees through internships.
In recent years, we have focused attention on improving occupational safety. I am very
happy that our systematic work to improve safety has borne fruit. The accident frequen-cy of our employees is at a record low: 7.6 occupational accidents per one million work-ing hours. The improvement of occupational safety has also been evident in the good feedback received from customers and in-dustrial safety authorities. Investment in oc-cupational safety continues.
A RESPONSIBLE PIONEERWe are constantly developing our operations and services to respond quickly to the needs of a changing world. Urbanisation, climate change and questions of accountability relat-ing to the environment and safety are affect-ing the development not only of the infra-structure field but also the whole construc-tion sector. At Destia, in all our operations, we particularly look after the welfare of the environment and the safety of our own per-sonnel and that of the whole of society. Changes in the operating environment are also creating opportunities for growth, to which we can respond by utilising our strong service package, vast expertise and operat-ing practices.
Since 2013, as the load of our organisa-tional load has been lower, we have focused on developing our operations and on digital-isation. Together with our construction op-erations, planning and road network surveys
have a significant role in the digitalisation of our production. We are a pioneer in mod-el-based production, and we make use of 3D digital models in the design of structures, the planning of production and the use of work machines. In addition to utilising digital solutions in design and production, we have targeted our investments into practical meth-odology and technology development.
During the past year, we initiated and advanced several development projects through which we are creating a foundation for our future profitable growth. One of our greatest efforts has been the ERP project, in which we are harmonising our operating practices and building tools to support our business. In 2016, the ERP development pro-ject will proceed to commissioning. Through this project, we are boosting our operations and improving our processes and competi-tiveness.
GROWTH BY WINNING MARKET SHARE2015 was the first whole year under private ownership. Our owner has supported us strongly in the implementation of our strategy and in the further development of the com-pany.
The aim of our growth strategy is to grow profitably through excellent custom-er work and by utilising our own expertise. Our business plan period will end at the end
We are constantly developing our operations and services to respond quickly to the needs of a changing world.
of 2016. During this year, we will be setting new targets for the next three-year period. Our strategic financial targets in the current three-year period have been a 5% growth in revenue, operating profit of 4%, return on investment of 15%, and equity ratio of 40%. We will review these for the next three-year period when setting the new targets.
The purposeful development of the com-pany continues, and I hope that our invest-ments, particularly in customer work, the development of our harmonised operating practices and occupational safety will show as better and added-value service for our customers. This will create the foundation for our profitable growth.
THANK YOU FOR 2015A big thank you to all hard-working Destia employees for your professional and com-mitted work. We will continue to build the bigger picture honestly, boldly and skilfully in 2016.
Thanks to all our customers, subcontrac-tors, the owner and other partners for their faith in us. We aim to continue our coopera-tion even more succesfully this year.
Hannu LeinonenPresident and CEO
6ANNUAL REPORT 2015
DESTIA’S BUSINESS OPERATIONS
TOTAL SOLUTIONS FOR THE ENTIRE INFRASTRUCTURE LIFE CYCLE ROAD CONSTRUCTION
We carry out large and demanding as well as smallerlocal road and street projects in a professional manner.However, large road projects requiring special expertiseis our strategic focus area. In accordance with ourlife-cycle model, our services include not only designand implementation, but also the maintenance andfinancing of traffic routes.
FOUNDATION AND FIELD ENGINEERINGWe build roads, streets and other infrastructure founda-tion structures using the latest technology in the field. Our work machinery is equipped with precise position-ing devices and control systems that allow the opera-tors to utilise 3D digital planning information. We are al-ready using model-based production at some 50 sites every year.
ROCK CONSTRUCTIONTogether with our broad partner network, we plan and construct tunnels and underground facilities, such as parking areas, goods and freight stations and civil de-fence shelters. Underground construction is becoming more common in growth centres, and infrastructure projects increasingly include the construction of tun-nels making rock construction one of our strategic growth areas.
ENERGY INFRASTRUCTUREIn addition to rock and railway business, energy infra-structure is another one of our strategic growth areas. We offer services in the construction, renovation and design of electricity distribution networks, lighting and telematics, district heating networks, natural gas net-works and wind farm projects.
Destia’s wide range of services covers the entire infra-structure life cycle from design to maintenance. Thanks to our diverse expertise, we can carry through subpro-jects or large projects in their entirety on the turnkey principle.
ENGINEER CONSTRUCTIONThe construction, maintenance and repair of concrete structures such as bridges, water towers, multi-storey car parks and piers are our fields of expertise. We main-tain and service most of Finland's bridges and we also have long experience in the restoration of aqueducts, railway bridges and museum bridges. In engineering construction projects, we use the sector’s latest meth-ods and equipment, which we are also continuously developing.
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MAINTENANCE Our maintenance services cover the winter maintenance of traffic routes and the living environment, as well as the maintenance of gravel roads, bridges and the traffic environment in general. Our high-quality operations are based on the most reliable weather and road weather forecasts produced by Destia’s Winter Maintenance Management Centre, experienced personnel, and so-phisticated working methods and equipment.
ORGANISATIONAL STRUCTUREOur operations are divided into four regional business units, Southern Finland, Western Finland, Eastern Fin-land and Northern Finland, as well as the national Con-sulting Services business unit.
The operations of the regional business units cover the construction and maintenance of traffic routes, traf-fic and industrial environments and the complete living environment, as well as the services of our Winter Main-tenance Management Centre, rock construction, energy infrastructure, railway construction and maintenance and aggregates and fleet services. The business of the Consulting Services business unit comprises design, road network surveys and international consultancy.
DESIGNOur expertise in infrastructure design is wide and com-prehensive: we carry out road, street, railway and re-gional planning as well as traffic, environmental, geo- technical, bridge and rock construction planning related to infrastructure projects. We also offer services for in-ternational consulting projects. In our planning, we uti-lise the opportunities presented by digitalisation, and we are already using information model-based planning in most of our projects.
ROAD NETWORK SURVEYSWe are the leading supplier of analysis, survey and quality control services relating to traffic route and envi-ronment investments in Finland. Our specialists are the most experienced in the country in analysing road con-dition and traffic. We have at our disposal a wide range of measuring equipment and testing methods.
AGGREGATESWe have about 300 soil areas around the country. Destia offers high-quality aggregates needed in the construction of roads and buildings, as well as for con-crete products and all types of surfacings. Our nation-wide sales and supply network enables us to deliver CE certified aggregate to any location in the country.
RAILWAY CONSTRUCTION AND MAINTENANCEOur railway services cover the entire life cycle of railway maintenance throughout Finland. Our railway work var-ies from demanding superstructure contracts over many kilometres to smaller bridge, culvert and mass changing works. We are responsible for half of the 12 maintenance areas in Finland’s network of railway tracks.
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STRATEGY AND TARGETS
PROFITABLE GROWTH BY WINNING MARKET SHARE
OUR VISION:
WE ARE THE NUMBER ONE CHOICE FOR OUR CUSTOMERS AND NUMBER ONE IN THE INFRASTRUCTURE SECTOR IN FINLAND
OUR MISSION:
BUILDING THE BIGGER PICTUREWe at Destia build, maintain and design our living environment so that it is efficient and safe. We cre-ate advanced solutions and servic-es with great professional skill, uti-lising the latest working methods in the industry.
OUR VALUES:
ACHIEVING GOALS FAIRLY, BOLDLY AND SKILFULLYOur operations are based on fairness, bold-ness and skill, and through these we achieve our goals. We are fair with our customers, part-ners and each other. We create responsible in-frastructure solutions with boldness and skill, building the bigger picture, piece by piece.
The key target of Destia’s strategy for 2014–2022 is to achieve profitable growth on the infrastructure market through excellent customer work and making use of the company’s own exper-tise.
Our core business comprises large road projects and infrastructure maintenance requiring special expertise. Our focus ar-eas of strategic growth are in the rock and railway businesses and in energy construction. Human resource develop-ment is one of our strategic areas of fo-
cus. In that, we are particularly investing in the development of customer work. Our strong expertise and the Destia spirit, our harmonised, ethically sustainable and responsible way of doing business, form the firm foundation for the implementa-tion of our strategy.
ANNUAL REPORT 2015 9
OUR COMMITMENT
We are committed to making Destia grow profitably and making it a producer
of complete infrastructure services providing the best customer service.
Of Destia’s stock of contracts, a significant part comprises long-term
projects and service contracts with both the public and private sectors.
STRATEGIC AREAS OF FOCUS
OUR FINANCIAL TARGETS FOR THE 2014−2016 OPERATING PERIOD• Average growth of 5% per year • Operating profit (EBIT) ratio 4%
by the end of 2016 • Return on investment ratio 15%
by the end of 2016 • Equity ratio 40% by the end of
2016
The Destia spirit
Ensuring conditions
Winning on the market
The leading areas of growth during the operating period: • track construction and maintenance• energy construction• rock construction
We are the number one choice for our
customers and number one in the
infrastructure sector in Finland
DigitalisationPerformance management
Building expertise and competence
CORPORATE RESPONSIBILITY AS PART OF DESTIA’S STRATEGY
Customer satisfactionProduction of services
Digitalisation
Customer-oriented service and project
management
Winning on the market
People and the environment
Ensuring conditions
Consistent way of working
The Destia spirit
Skilled and thriving Destia personnel
Procurement and partnershipsSafety
EnvironmentProfitable business
Destia solutions (R&D)
Ethical businessParticipation in society
Internal and external corporate communicationsThe foundation of corporate responsibility: Destia’s values of goal-achievement through fairness, boldness and skill.
Our aim is to be the number one choice for our customers and number one in the infra-structure sector in Finland. Putting our strat-egy into practice requires responsible actions from us, our partners and those working with us. The corporate responsibility programme guides our day-to-day corporate responsibil-ity work and leadership.
The underlying themes of our strategy are the Destia spirit, ensuring the right conditions
and winning on the market. The Destia spirit is created by our harmonised, responsible way of working. Securing strong operating conditions covers a wide range of significant themes related to people and the environ-ment. We endeavour to win markets through innovative and strongly customer-driven ac-tivities.
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OPERATING ENVIRONMENT
MEGATRENDS CHANGING THE INFRASTRUCTURE AND CONSTRUCTION SECTORS
Finland’s infrastructure and construction sectors are in the midst of great change. In order to take advantage of the opportunities presented by the change and to solve problems, companies need completely new kinds of operating practices and services.
URBANISATION is creating needs to develop infrastructure Urbanisation, one of the most significant global meg-atrends, is also changing urban structures and creat-ing needs for infrastructure development in Finland. Of the Finnish infrastructure market, 56% is in the sub-regional units of the six largest urban areas.
CLIMATE CHANGE demands the development of infrastructure systems Climate change requires the society and private property owners to develop their infrastructure systems to cope with new conditions such as heat and heavy rain.
AGEING POPULATION creates new types of needs for living environmentsAs life expectancy increases and the birth rate declines, the average age of the population is rising in nearly all industrialised countries, including Finland. An ageing pop-ulation needs accessible and safe living environments. In Finland’s sparsely populated regions, in particular, where ageing is a special problem, new kinds of service con-cepts are also needed to keep the regions vital.
RESPONSIBILITYSafety and environment issues are becoming increasingly prominent As a result of increased environmental awareness in the society and due to multinational environmental agree-ments, responsibility issues concerning the environment and safety have become prominent in the operations of all organisations. The development of corporate responsibili-ty is also an increasingly important function in companies.
Railway traffic to prevent congestion and reduce the burden on the environment
Subterranean construction as a solution to the shortage
of space in citiesSafe and smooth
traffic environmentsAccessible and safe living environments
Renewable energy solutions
Efficient, environmentally-friendly, reliable energy
infrastructure
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Careful planning creates a strong founda-tion for safe solutions. Our planning and consulting services cover traffic safety plan-ning services from regional plans to prelimi-nary surveys and traffic safety assessments of the plans.
WE TAKE CARE OF THE WELFARE OF THE ENVIRONMENT Efficient infrastructure serves
the needs of citizens and companies but is also environmentally effective. Our aim is to minimise the environmental impact of our own operations and solutions, and to con-stantly improve resource efficiency, material efficiency and energy efficiency.
The environmental impact of roads and streets must be minimised. In order to achieve this goal, we have developed solu-tions, for example, for the protection of groundwater, the conservation of rivers and streams and reducing the electricity con-sumption of roads.
Efficient operations save the environment. We are a pioneer in the use of work machine automation. Work machine automation is in use at nearly all our suitable civil engineer-ing-focused sites. The aim is to boost the
WE BUILD EFFICIENT URBAN ENVIRONMENTSEfficient traffic solutions and
roads in good condition are a prerequisite for smooth movement in cities. We are a specialist in road and street projects. In addi-tion to planning and implementation, we also take care of the maintenance of traffic routes.
Subterranean construction brings more space to confined urban environments, and the volume of subterranean construc-tion is constantly increasing in growth centres. We plan and construct tunnels and underground facilities, such as parking areas, goods and freight stations and civil defence shelters.
In traffic solutions, congestion prevention and environmental aspects favour an in-crease in rail traffic. Our railway network services cover the entire life cycle of railway maintenance throughout Finland, from plan-ning to maintenance.
In urban environments, diverse expertise in engineering construction is needed. The construction, maintenance and repair of con-crete structures such as water towers and railway bridges and multi-storey car parks are
performance and precision of work and to re-duce material waste.
WE DEVELOP INFRASTRUCTURE SYSTEMS THAT WITHSTAND EXTREME WEATHER PHENOMENA
As the climate warms, infrastructure sys-tems must be developed to withstand in-creasingly variable and more powerful weather phenomena. We renew old energy networks and take them underground in order to safeguard the security of supply. We also develop our maintenance services to meet the new needs created by extreme weather phenomena.
WE OFFER SOLUTIONS FOR THE NEEDS OF AN AGEING POPULATIONAn ageing population needs ac-
cessible and safe living environments, and we develop different types of solutions to preserve and build them. Alongside our re-gional road-maintenance contracts and the Winter Maintenance Management Centre, we have created services to support safe traffic and to improve the availability of goods and services in sparsely populated regions, where ageing is a special problem.
among our fields of expertise. We maintain and look after most of the bridges in Finland.
WE INVEST STRONGLY IN SAFETYHigh-quality traffic arrange-ments increase the safety of
road users. Ensuring safety during construc-tion and end use is the starting point in all our road construction projects. In end-solutions, safety is increased, for instance, by correctly positioned over- and underpasses and green bridges.
The efficient care and maintenance of traf-fic environments is a prerequisite for safe traffic. Our maintenance services cover the winter maintenance of traffic routes and the living environment, as well as the mainte-nance of gravel roads, bridges and the traffic environment in general.
We also have long term experience of analysing road conditions and traffic. We have a wide range of measuring equipment and test methods at our disposal, producing reliable information on the current state and future needs of the road network. Condition surveys provide crucial initial data for allocat-ing funds for improving roads and streets, for planning improvements and for maintaining road surfaces.
DESTIA AND THE OPPORTUNITIES CREATED BY MEGATRENDS
WE RESPOND TO THE NEEDS OF THE CHANGING OPERATING ENVIRONMENT
Destia is constantly developing its operations and services to meet the needs of a rapidly changing world; piece by piece we build a better functioning society and cre-ate the conditions for safe and smooth movement. In all our operations, we take spe-cial care of the welfare of the environment and the safety of our own personnel and the whole of society. Our service portfolio, vast expertise and operating practices cre-ate a solid foundation for growth, created by the trends in our operating environment.
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DESTIA AND CORPORATE RESPONSIBILITY
MAKING THE WORLD RUN SMOOTHER
Our corporate responsibility work is guided by our mission, vision, values and strategy. Our values define that we strive to achieve our goals through fairness, boldness and skill. Our vision of being the number one choice for our customers and the number one in the infrastructure field in Finland re-quires responsible operations, both from us and from those who work with us.
In corporate responsibility reporting, we follow the Global Reporting Initiative (GRI) reporting guidelines and their G4 version at the core level.
CORPORATE RESPONSIBILITY PROGRAMME AND ETHICAL GUIDELINES GUIDE OUR OPERATIONS Responsible operations in our daily work and management are guided by our corporate re-sponsibility programme and ethical guide-lines. The corporate responsibility programme
is based on the themes fundamental to re-sponsibility as outlined by us and our stake-holders. The ethical guidelines describe the operating principles accepted in our compa-ny, which create a common basis for our de-cision-making and operations. Our common operating principles define the Destia spirit, our shared ethically sustainable and respon-sible way of doing business.
ESSENTIALITY CHART CREATES THE FRAMEWORK FOR OUR OPERATIONSCreated in autumn 2013 by combining the views of Destia’s employees and a dialogue with stakeholders, the essentiality chart is our tool for formulating and managing corpo-rate responsibility policies, and it serves as the foundation for our corporate responsibili-ty programme.
The aspects of our corporate responsibili-ty considered the most important are located in the upper right section of the chart. They constitute the key content of our corporate responsibility and GRI reporting, and we an-nually set targets, measures and indicators for them.
Destia’s operations have a significant impact on the society, the environment and the company’s stakeholders, making our field of corporate responsibility multifaceted.
minor
min
or
moderate
mod
erat
e
INTE
REST
OF
STAK
EHOL
DERS
IMPACT ON DESTIA’S OPERATIONS
great
grea
t
Social participation
Production of services
Safety
Ethical business
Procurement and partnerships
Skilled and thriving Destia personnel
Profitable business
Customer satisfaction
Internal and external corporate communications
Environment
New solutions and sector development
ESSENTIALITY CHART PRESENTING DESTIA’S CORPORATE RESPONSIBILITY
READ MOREGRI compilation starts on page 27 of the annual report.
13ANNUAL REPORT 2015
Stakeholder Importance of and interaction with the stakeholderCustomers and clients
Our customers include government organisations, municipalities, cities, industrial en-terprises and other businesses. Of our stock of contracts, a significant part comprises long-term projects and service contracts with general government and companies.
Owner, financiers and shareholders
Destia was transferred to the ownership of Ahlström Capital on 1 July 2014 when Ahlström Capital purchased the entire shareholding in Destia Ltd from the State of Finland. Destia Ltd continues as a successful, dynamic market player.
Personnel Our skilled and motivated personnel serve our customers and infrastructure users daily all over Finland. Human resource development is one of our strategic areas of focus.
Subcontractors and partners
We work with thousands of suppliers every year. Our procurement operations are mainly with local service providers. In our operations, we make use of a network of reliable sup-pliers.
Infrastructure users, neighbours
We pay particular attention to the safety of and communication with the users of the infrastructure and the multitude of people living and working in our vicinity.
Authorities In our field of business, quality, safety and environmental aspects are some of the key elements considered in providing services. We comply with the general requirements as set out in the legislation and the special requirements of each project or service contract.
Decision-makers Infrastructure is an essential element of Finland’s success and smooth everyday life. Political decision-makers contribute to creating the operating environment in which we offer our services nationwide. Public spending is controlled through transparency and strict rules for competitive tendering. We do not support any political parties.
CLOSE INTERACTION WITH STAKEHOLDERSDestia builds, maintains and designs traffic and industrial environments. We are part of a value chain that comprises a large group of players and stakeholders. The vital interac-tion takes place between us and our custom-ers. Many of our projects have a direct im-pact on the everyday life of the infrastructure users as well as the people and businesses in the vicinity.
The form and significance of stakeholder inter-action are determined by the nature of Destia’s business operations and value chain.
Owner, financiers and shareholders
Sub-contractors and partners
Sector development
Laws and regulations
CustomerRequirements,
criteria
Infrastructure users,
neighbours
Built environment,
nature
Personnel
14ANNUAL REPORT 2015
PROFITABLE BUSINESS
WELL-BEING FOR ALL STAKEHOLDERS
DIVISION OF FINANCIAL BENEFIT BY STAKEHOLDER 2015
INVESTMENTS MEUR 9.2Gross investments (2014: MEUR 8.0)
FINANCIERS MEUR 4.3Financing costs (2014: MEUR 5.7)
PERSONNEL MEUR 71.5Salaries and remuneration (2014: MEUR 71.1)
SUPPLIERS MEUR 324.7Materials and services from external subcontractors
(2014: MEUR 284.2)
PUBLIC SECTOR MEUR 17.2Taxes and tax-like payments MEUR 0.5 (2014: MEUR 2.4)Pension and indirect personnel costs MEUR 16.7 (2014: MEUR 16.1)
CUSTOMERS MEUR 462.82015 revenue
(2014: MEUR 431.5)
Destia’s financially responsible operations aim to generate well-being through the crea-tion of sustainable added economic value. This is best achieved by developing and of-fering top quality services for our customers. By selling them profitably, we can respond to the owner’s profit expectations through a good return-on-investment ratio and a healthy equity ratio. We also want to provide jobs, create financial well-being for various stakeholders by means of our procurement and investments as well as ensure that taxes and tax-like liabilities are paid. For us to be able to achieve these targets, our business needs to grow, show a profit and be cost-
effective. Moreover, it is typical of the infra-structure and construction sectors that satis-fying customer needs and creating financial well-being for stakeholders require persever-ance from companies.
In the construction industry, the concept of financial responsibility also means that companies are responsible for ensuring that customers receive the services and struc-tures that they need at the agreed price and quality and on schedule. Throughout the en-tire life cycle, the infrastructure created must increasingly be able to meet the changing needs of its users.
ANNUAL REPORT 2015 15
PRODUCTION OF SERVICES
CUSTOMER DRIVEN ACTIVITIES AND RESPONSIBILITY GUIDE OUR OPERATIONSDestia has a key role in the Finnish society. Thanks to our large service portfolio and an extensive network of offices, our operations affect the lives of nearly all Finns. We build, maintain and design not only traffic and in-dustrial environments but also complete liv-ing environments. In the production of ser-vices, we make use of the most advanced work methods and the opportunities afforded by digitalisation.
The foundation of our service production is customer centricity, essential elements of which include keeping customer promises and implementing services following the objectives set, in an efficient, high-quality and economic fashion. Customer surveys show that our services are considered of high quality and we are seen as a reliable operator, that also participates in the further development of the entire field.
Responsible methods are part of our everyday project operations. We pay
READ MOREWe build the Kettumäki bridge in Hämeenlinna.
special attention to the transparency of our operations, and we have zero tolerance to misuse.
We possess the international combined ISO 9001 and ISO 14001 quality and environmental certificate, covering our infrastructure construction, infrastructure maintenance, consulting, aggregates and railways services. Our operations fully comply with the certification requirements, by which we can ensure for our customers and other stakeholders that the operations are of top quality and take environmental aspects into consideration. In addition, our operating practices comply with the OHSAS 18001 occupational health and safety standard.
In corporate responsibility reporting, we follow the Global Reporting Initiative (GRI) guidelines and their G4 version at the core level. The GRI compilation is part of our an-nual report.
ANNUAL REPORT 2015 16
CUSTOMER SATISFACTION
OUR AIM – TO BE THE NUMBER ONE CHOICE FOR OUR CUSTOMERSThe aspiration to high customer satisfaction is laid down in Destia’s strategy, and it is also a starting point for the company’s responsi-ble operations. Our aim is to be the number one choice for our customers, a trusted part-ner and a pioneer in our field. We want to be the first company that our customers think of when they need a reliable versatile specialist in the field of infrastructure and construction. It is also important for us to be the most at-tractive partner for our entire cooperation network. Customer satisfaction is one of the key indicators showing how well we are suc-ceeding in our work, the development of which we monitor regularly.
CUSTOMER SATISFACTION AN IMPORTANT OBJECTIVE IN PROJECT MANAGEMENTCustomer satisfaction is an important part of Destia’s project management. Clear pro-ject-specific and Group-level objectives have been set for it, and its development is moni-tored systematically. We carefully analyse the customer feedback we receive and, on that basis, we take the necessary development steps, on which we also report internally.
Our key indicators of customer satisfac-tion are the quarterly-reported project feed-back and the net popularity index. In 2015, project feedback was 4.0 (4.1 in 2014). The net popularity index, which indicates how large a share of our customers would recom-mend us, was 12 (7). Improvement in cus-
tomer satisfaction is linked to our strategic indicators.
Based on the feedback we receive from customers and partners, our stakeholders expect from us above all responsible oper-ations, adhering to the terms set out in con-tracts, innovation and a successful service package. The deepening of customer work and the development of operating practices are continuing in 2016 as part of our strate-gic development programme.
SATISFIED PERSONNEL – SATISFIED CUSTOMERSWe believe that the job satisfaction of our own personnel has a decisive significance for customer satisfaction. Therefore, we invest strongly in job satisfaction, and we annually measure the satisfaction of our employees with their job, manager, work community and the company as a whole.
We pay particular attention to the ser-vice attitude of our personnel. Encouraging the adoption of a ‘Yes, we can!’ attitude and encouraging employees to listen to the customers and resolve their challenges are important elements of the development of customer work and project management. At the core of the Destia spirit is the principle of doing patient and good work honestly and fairly – always thinking of what is best for the customer.
17ANNUAL REPORT 2015
SAFETY
SAFETY IS CENTRAL TO ALL OPERATIONSDestia wants to guarantee safe and healthy work conditions for all its employees and subcontractors working at its sites, and also takes care of the traffic safety of road users. Safety is a key element of our social respon-sibility and our aim in all our operations.
In recent years, our occupational safety has clearly improved and this good trend continued in 2015. The accident frequency, or the number of workplace accidents lead-ing to at least one day of absence per one million working hours, dropped to the record low figure of 7.6 (9.3 in 2014). 6.5 work days were lost due to sickness or accidents per person year, meaning the sickness absence rate was 2.6.
THE PRINCIPLE OF PLANNING FROM GENERAL TO SPECIFIC ENSURES PROJECT SAFETYOur business operations are project-based, and they are typically carried out at different sites and in varying conditions. We strive to ensure safety at the sites in accordance with the principle of planning from general to spe-cific. This means that, in addition to our com-mon safety procedures, all safety matters re-lated to a project are first examined from the
perspective of the entire project and then specified in more detail for each phase of the project.
Because many of our projects are carried out along traffic routes, traffic safety is a par-ticular priority for us. Safety is ensured with properly planned and implemented traffic arrangements at the sites for the benefit of vehicle traffic and employees. If necessary, these arrangements also cover rail traffic. In maintenance work, traffic safety is ensured by, for example, marking the fleet clearly and performing the work at appropriate times.
SAFETY MONITORED CLOSELY AND MEASURED WITH PRECISIONEach year, the measures related to occupa-tional safety and the allocation of the related responsibilities are decided on by the Occu-pational Safety Committee chaired by Destia’s President and CEO. The Occupa-tional Safety Committee is also responsible for monitoring the measures affecting occu-pational safety; the responsibility for imple-menting these measures, however, lies with the line management. Safety issues are pro-cessed regularly by our management teams and reported on a monthly basis.
ANNUAL REPORT 2015 18
CONSTRUCTION INDUSTRIES’ 2020 COMMITMENTDestia has signed the Confederation of Finn-ish Construction Industries RT’s “zero acci-dents in the field of construction 2020” com-mitment. The management’s occupational safety commitment and the principles of safe work are:• An accident-free site/plant is a matter of
honour to us.• Our goal is for accidents to decrease by
30 per cent each year.
SAFEST OPERATOR 2015
We reward our personnel and units for acci-dent-free operations. First awarded in 2011, the Safest Operator award has had a winner every year since. In 2015, rock construc-tion received the honour for its outstanding achievement: 0 occupational accidents dur-ing the year.
In addition to Safest Operator, since May 2012 we have also rewarded our business units for accident-free periods of 120 days. An accident-free period means that not one absence resulting from a workplace accident and leading to absence from work may occur within that time.
Our systematic efforts to develop occupa-tional safety are yielding results: the number of occupational accidents has declined sig-nificantly at our sites.
Four times a year, all our staff are sent a safety bulletin, which contains topical mes-sages from the Occupational Safety Com-mittee, follows the development of the key figures related to safety, discusses accidents and safety observations that have taken place, and gives advice on how to avoid ac-cidents.
COMPULSORY ONLINE INDUCTION OFFERS BASIC INFORMATION ABOUT SAFETY ISSUESIn the construction business, the careful in-duction of employees in their jobs and work locations is particularly important, as people must be able to perform their work safely. In a variety of ways, we ensure that all those working at our sites are familiar with our safety principles.
In 2013, we introduced an online induc-tion course, which provides the fundamen-tals on our company and its approach to safe management and work. The induction is compulsory for all Destia employees and subcontractors before they start work on the company’s sites. A total of some 6,200 per-sons have completed online induction, 4,200 of whom are subcontractors. In addition to our permanent staff, all our summer work-ers also participate in induction events that cover the principles of safe working. We also teach occupational safety issues at different institutes.
ACCIDENT FREQUENCY TREND
SERIOUSNESS OF INJURIES
NUMBER OF SAFETY OBSERVATIONS
2012 2013 2014 2015
Absence of 1−29 days 33 21 18 15
Absence of more than 30 days 5 4 3 3
2013 2014 2015
400 799 1,108
2012 2013 2014 2015
• We enhance occupational safety system-atically.
• We examine each accident and danger-ous situation.
• We have all the necessary resources in use for taking care of occupational safety matters.
• We compile statistics and report acci-dents according to shared instructions.
• We also require compliance with these goals and demands from our contracting parties.
7.69.3
10.8
15.6
19ANNUAL REPORT 2015
the ‘one over’ principle, which means that, in these matters, the decision-maker is the su-pervisor’s supervisor.
We want to guarantee safe and healthy working conditions for all our employees. Through responsible actions, we prevent occupational accidents and health risks and improve working conditions.
Each Destia employee is responsible for the effectiveness, safety and honesty of his or her own decision-making and actions, and for the creation and maintenance of a good working environment. We are worthy of the trust placed in us.
SKILLED AND THRIVING DESTIA PERSONNEL
STRONG INVESTMENT IN HUMAN RESOURCE DEVELOPMENT
Infrastructure and construction sector's de-velopment trends, in particular the increase of digital solutions, require that the compa-nies constantly develop the expertise of their personnel with perseverance. Destia focuses special attention on the development of cus-tomer relationship management, engineering construction and site automation expertise.
A prime example of the development of the expertise of our personnel is the Tosi-toimi training organised for many years now, focusing on the development of common op-erating practices and customer work.
We also invest in improving our staff’s qualifications. In our sector, important qualifi-cations include those to do with road safety, railway work safety, the occupational safety card and a professional lorry driver qualifica-tion.
PERSONNEL SATISFACTION INCREASEDWe annually measure the satisfaction of our employees with their job, supervisor, work community and the company as a whole. Other key themes of the survey are well-be-ing and motivation at work.
On the scale of 1 to 5, the overall average in the 2015 survey was 3.81 (3.79), the index measuring supervisory work was 3.87 (3.88), and the well-being at work and commitment index was 3.85 (3.83). Staff were also asked how well, in their opinion, Destia takes into account environmental responsibility and social responsibility. The score for environ-mental responsibility was 3.98 (3.92), and for social responsibility it was 3.79 (3.71). The response rate was 76% (78%).
Every year, we process the results of the personnel survey unit by unit and team by team and, based on discussions, we select 1 to 3 measures for implementation in order to further improve the results.
GOOD SUPERVISORY WORK IS KEY FOR REACHING TARGETS Supervisors play a key role in the motivation and commitment, welfare and job satisfac-tion of employees. Good supervisory work is also an area of focus in our strategy and one basis of our supervisors’ incentive system.
Our supervisors are responsible for ensur-ing that there is frank, open and constructive
discussion on all work-related matters, and that participation in such discussion is the right and duty of every Destia employee. Supervisors also set a good example in the implementation of responsible work practic-es and intervene in any issues requiring cor-rection. Each supervisor must hold regular development discussions with their subordi-nates.
CLEAR EMPLOYER AND EMPLOYEE PRINCIPLESAs an important part of our corporate culture, responsibility is instituted for us in the high ethical requirements related to the work of the company’s Board of Directors, manage-ment, other personnel and partners.
We respect our employees’ basic rights and the collective and other agreements that bind us. We select employees on the basis of suitability for the job, experience and edu-cation. We treat everyone equally and assess our personnel based on work performance. Decisions on an employee’s employment relationship and its financial rewards adhere to the guidelines given and always at least to
READ MOREOur ethical guidelines can be found in full at our website.
20ANNUAL REPORT 2015
PERSONNEL AGE DISTRIBUTION31 December 2015
PERSONNEL GENDER DISTRIBUTION 31 December 2015
men ............... 86%
women .......... 14%
permanent temporary
DEVELOPMENT OF NUMBER OF PERSONNEL31 December 2015
2012 2013 2014 2015
EVERY YEAR 150 SUMMER WORKERS AND TRAINEES
“A nice, varied and responsible job” − that’s how young people who worked at Destia last summer described their summer job. According to the feedback received, good experiences result from the fact that we at Destia have a good spirit, we induct people properly into their jobs and we take good care of occu-pational safety.
“Another interesting week behind, full of experiences. A hot and sunny Fri-day included casting the ingredients for concrete rail elements and keeping good order at the site in general. Varied tasks provide know-how, which you
don’t learn sitting in lectures at school,” said one summer worker on our in-tranet.
Engineering student Janne Heikkinen was so inspired by his summer job at Destia’s National Road 8 multilevel interchange site at Luostarinkylä that he stayed on in the job until the end of the year. “Destia has a nice group of peo-ple, and they take good care of occupational safety,” he said.
–24 ............... 4.9%
25–29 ......... 11.7%
30–34 ......... 11.5%
35–39 ......... 10.5%
40–44 ........... 6.7%
45–49 ......... 10.7%
50–54 ......... 15.6%
55–59 ......... 17.9%
60–64 ........... 9.5%
65– ............... 1.1%
1,417
1,502
85
1,375
1,465
90
1,354
1,429
75
1,403
1,492
89
21ANNUAL REPORT 2015
PROCUREMENT AND PARTNERSHIPS
SUPPLEMENTING IN-HOUSE RESOURCES
In Finland, Destia operates nationwide and cooperates with thousands of suppliers. We carry out projects by supplementing our own fleet and expertise by extensive subcontract-ing. We select the partners in our supply chains on a project-by-project basis, often from local, skilled subcontractors. Therefore, our procurement is largely local service pro-curement and, according to the feedback re-ceived from stakeholders, we are considered a significant local employer.
The partnerships of “Destia’s Designat-ed Partner” form a collaboration network supplementing our expertise, enhancing the efficiency of project implementation and en-suring a high-quality end-result for our cus-tomers. In 2015, we increased the partner-ship agreements of the “Destia's Designated Partner” network by 70 percent. The network continues to grow.
We mainly procure materials from external suppliers. Destia only produces aggregates,
which we typically acquire from locations close to projects. Examples of materials and products that we procure include various steel products and road salt to prevent slip-periness. Before concluding an agreement, we evaluate all material suppliers both in Fin-land and abroad and check their production plants or areas. The manufacture of products or materials and the operations of production plants are frequently monitored by a third party.
Our entire procurement process adheres to our values, ethical guidelines and the prin-ciples of fair competitive tendering. We cen-trally acquire all products and services that are remarkable in terms of volume. In addi-tion to the laws and regulations, we require from our partners the right skills and a will-ingness to comply with our operating models and safety and environmental regulations.
In 2015, our total volume of procurement was MEUR 320.5 (263.4). Because of the
nature of our business, most of our procure-ment is carried out in Finland, but we also procure some products and services directly from foreign suppliers. In 2015, 1.5% (2.9%) of all our procurement was made from for-eign suppliers.
THE CONTRACTOR’S OBLIGATIONS AND LIABILITY COMBATS THE GREY ECONOMY In our operations, we observe the Act on the Contractor’s Obligations and Liability when Work is Contracted Out, by which we en-deavour to combat the grey economy and promote fair competition between compa-nies and compliance with the terms and con-ditions of employment. We also require our suppliers to take care of their legal obliga-tions, and in our service procurement con-tracts we require them to be registered in the Contractor's Obligations Act register (Tilaaja-vastuu.fi). This makes it easier to check, doc-ument and monitor the obligations that sup-
pliers have under the Act. We also require them to meet the obligation to provide notifi-cations and reports in the construction in-dustry as laid down in the legislation. We re-quire our foreign service providers to supply the same reports and information under the laws and regulations that we expect from our Finnish suppliers.
CE CERTIFICATIONS COMPULSORY FOR CONSTRUCTION PRODUCTSSince 2013, CE certification has been com-pulsory for construction products. This certi-fication indicates that the manufacturer de-clares that its product meets the require-ments of the relevant EU directives and has undergone any inspections that may be re-quired. The obligation for CE certification concerns the aggregates that we produce and the products that we procure.
22ANNUAL REPORT 2015
ENVIRONMENT
OUR AIM IS TO MINIMISE ENVIRONMENTAL IMPACTDestia’s aim is to build environmentally-effi-cient infrastructure which also serves the needs of citizens and businesses as well as possible. We constantly work to minimise the environmental impact of all our projects and to improve resource, material and energy ef-ficiency.
Our environmental management is based on an environmental management system designed under the ISO 14 001 standard. This ensures that environmental protection targets are taken into consideration in all our operations and decision-making. In this way, our environmental management promotes the eco-efficiency of our own operations and reduces environmental harm throughout the life cycle of our services and solutions.
Infrastructure projects entail a great deal of regulation and activities subject to various permits. We always operate in accordance with the valid environmental legislation and regulations.
As part of project management, we moni-tor the level of customer satisfaction towards our care of environmental issues. In 2015, we were given an average mark of 4.0 on a scale of 1−5 (4.0 in 2014 and 2013) for the man-agement of environmental and safety issues.
NATURE VALUES IMPORTANT IN THE USE OF SOIL AND AGGREGATES Destia has 316 licensed aggregate areas. In 2015, about 100 areas were in active use.
Every year, we use some 3 million tonnes of soil and aggregates.
In soil and aggregates extraction, we al-ways strive to conserve natural biodiversity. When acquiring new areas, we study their natural values in advance and systematically exclude protected areas and those that are otherwise valuable from a natural perspective from our operations. Legislation specifies the most valuable species and habitats, but we also aim to conserve other valuable locations on our own initiative.
Extraction areas at the end of their life cycle are treated so that vegetation returns to them as quickly as possible. Soil and ag-gregates extraction is not always a threat to natural biodiversity and may even increase it. For example, once our operations have ended, a quarry pond, a cliff for birds to nest on or a sunny slope for sun-loving vegetation may be created in the area.
MORE EFFICIENT WORK FOR THE GOOD OF THE ENVIRONMENTWe are a pioneer in the utilisation of working machine automation, and we use it to boost the efficiency of our work, to improve accu-racy and to reduce material waste at nearly all our suitable earthwork sites.
We always recycle and reuse construction materials whenever possible. Examples of this include the reuse of crushed concrete and crushed material made from waste as-
phalt, as well as the use of old structural lay-ers in road projects.
In order to optimise material efficiency and fuel consumption in project activities, we pay close attention to the planning of operat-ing practices and logistics. We also monitor the use of our fleet of trucks using a GPS-based system. By combining operating and fuel consumption data, we get precise infor-mation about the efficiency and economy of each truck. In our railway business, we also monitor the efficiency of the use of the fleet, and we have succeeded, for example, in re-ducing the number of transfers of our rolling stock by 15% in 2015.
Furthermore, energy audits were per-formed at two of Destia's worksite bases,
providing several good ideas for cutting en-ergy consumption.
QUALITY AND ENVIRONMENTAL CERTIFICATE FOR ALL SERVICESWe possess the international combined ISO 9001 and 14001 quality and environmental certificate, covering all our services: infra-structure construction, infrastructure mainte-nance, consulting and aggregates services and the railway business. Through proce-dures which are in line with the certification requirements, we ensure for our customers and stakeholders that our operations are of high quality and take into account the well-being of the environment.
MODELLING NOISE
Certain stages of aggregate extraction gen-erate very high levels of noise. In their work, Destia noise planners Taina Mattila (on the left) and Hannele Sivonen use CadnaA noise calculation software that they created in their work, by which they can study how much noise is generated by aggregate extraction and crushing. A noise impact assessment is always completed before the work is actually begun. The greatest noise originates from drilling, breaking and the crushing plant. By means of this model, they can find locations at the site that are as favourable as possible for these operations, so that the noise does not cause unreasonable harm to the immediate surround-ings. A noise survey is also a good way to en-sure the granting of environmental permits.
23ANNUAL REPORT 2015
NEW SOLUTIONS AND SECTOR DEVELOPMENT
PRODUCT DEVELOPMENT RESPONDS TO THE NEEDS OF A DIGITALISING SECTORIncreasing digitalisation is revolutionising the entire infrastructure and construction indus-try. It affects the way how projects are de-signed, implemented and monitored. Re-al-time production reporting solutions boost efficiency, improve the quality of the work and end-products and make possible more effective reporting and communications be-tween the various parties. Destia is constant-ly developing its services to respond quickly to the demands of a changing world.
In order to take full advantage of the opportunities presented by digitalisation, in our R&D work we invest strongly in developing digital operating models and the production practices exploiting them. Our product development can be divided into three areas: model-based production, mobile data acquisition and reporting in production as well as production-oriented method and technology development.
In our field, we are a pioneer in information model-based production, whereby the road models and digital models of earth structures produced by designers can be transferred to production by means of working machine automation. Our work machines are equipped with satellite positioning and a control system by which the machine operator can build very precisely using three-dimensional material. The production method increases efficiency,
improves quality and reduces material waste. The work machine also serves as a measuring device in quality assurance, which reduces the measurement work associated with the traditional way of working in this work stage.
Model-based material can be distributed wirelessly to the work machines through a centralised server solution. The machines are in constant contact with the server, so their location and operation can also be accurately monitored online from any point. Out in the field, supervisors can use mobile
devices to utilise the material collected on the server, such as cross-sectional diagrams of structural models and the actual measurement points of the working machines.
The modelling of construction planning material also brings other benefits for design and construction projects. With models, it is possible, even before implementation, to visually examine the functionality and compatibility of structures and to calculate the necessary amounts of materials needed for different purposes. In that way, the end result of design is more error-free and fewer surprises are encountered out in the field.
In 2015, Destia had more than 50 model-based construction projects ongoing and, in road and railway maintenance, mobile data acquisition and reporting play an even more extensive role. In these services, with subcontractors included, we have more than 2,000 users of mobile data acquisition. Through wireless data transfer extending to the equipment and with various mobile devices, we can collect a wide variety of information on production and then transmit it to the servers for analysis. The information can be used, for example, for planning, monitoring and documenting maintenance measures, the supervision of working time and in a wide range of reports for different user groups.
In addition to utilising digital solutions in design and production, we have targeted our investments into practical methodology and technology development. Prime examples of this include the development of the fleet and the equipment used in railway maintenance and road maintenance, as well as solutions that improve the safety and quality of concrete construction.
NEW EXPERTISE NEEDED IN DIGITAL FUNCTIONSIncreasing digitalisation sets new challenges for the expertise of our personnel and sub-contractors. Expertise related to the utilisa-tion of information models and site automa-tion is an area we are focusing on in terms of skills development. In order to train new gen-erations of experts, we cooperate closely with colleges and organisations in the field. We aim to be a specialist and reliable partner for colleges, developing training in the sector and offering interesting jobs, both for student summer workers and for young graduates.
We are also actively involved in the development of the entire Finnish infrastructure industry. We have been involved in developing customer practices in the infrastructure sector, by participating, for example, in the activities of the infrastructure modelling forum buildingSMART Finland.
ELEMENTS OF DESTIA’S PRODUCT DEVELOPMENT
Model-based production
Mobile production data acquisition
Production-oriented development of methods and technology
24ANNUAL REPORT 2015
INFORMATION MODEL-BASED PLANNING AND CONSTRUCTION
At the site of the multilevel interchange on National Road 8 at Luostarinkylä in Rauma, we are implementing a design-and-build (DB) project making effi-cient use of information models and automation. As pioneers in information model-based construction, at this site we have taken the method further than anywhere else in Finland, while gathering valuable experience for the further development of the method.
The information model is maintained and updated in
a cloud-based system
Real-time monitoring helps in quality
assurance
The site is planned as a 3D information model
Work machine control systems utilise the plan and update the
realised outcomes into the information model
The customer receives precise documentation about the project implemented
READ MORE
NEW TOOLS AT USE ON A DESTIA PROJECT IN RAUMA
ANNUAL REPORT 2015 25
SOCIAL PARTICIPATION AND COMMUNICATIONS
ACTIVE PARTICIPATION IN SOCIETY
We are involved in the operation of various associations and organisations in order to promote the handling of and decision-mak-ing transparently matters important to our business. We participate in the activities of associations and organisations in the energy, construction, road building and service sec-tors, for example. In these, we exert influ-ence both as a company and through per-sonal memberships. Every Destia employee has the right to participate in social issues. The starting point of our participation is that our representative should be actively in-volved in the activities of the association, preferably as a member of the board, a rele-vant working group or some other body. We do not support political or religious organisa-tions.
DESTIA’S MEMBERSHIPS IN ASSOCIATIONS AND ORGANISATIONS• Finnish Energy Industries• FinNuclear Association• Infra Contractors Association in Finland• Association of Finnish Advertisers• Finnish Tunnelling Association• Service Sector Employers Palta• Nordic Road Council Finnish Division
• Pohjois-Suomen Rakennusklusteri Ry (Construction cluster of Northern Finland)
• BuildingSMART Finland• Finnish Quality Association• Finnish Road Association• Finnish Association Of Consulting Firms
Skol• Tieveteraanit ry (Road veterans)• General Industry FederationAlso memberships in different regional chambers of commerce to promote local networking.
CORRECT, ADEQUATE AND TIMELY INFORMATIONCommunications are part of all of Destia’s operations. Our communications culture is based on diverse interaction and active dia-logue with our stakeholders. We communi-cate openly, reliably and without delay.
We communicate to our personnel about matters concerning them openly, honestly and without delay, and each Destia employ-ee has an opportunity to make a difference, provide feedback and make themselves heard.
The goal of internal communications is to help Destia employees understand the basic
messages of our strategy, vision, mission and corporate values.
We measure internal communications on the basis of grades given in annual employee satisfaction surveys for communications and the understandability of messages related to the strategy. In the 2015 employee survey, on a scale of 1 to 5, the staff graded their own understanding of the company’s strategy 3.9 (3.8 in 2014). Destia’s internal communica-tions were graded 3.5 (3.5).
In 2015, we updated our intranet service. The new Desnet intranet reaches all our employees regardless of their location and offers them a channel to produce and share information. In summer 2015, our summer workers acted as so-called "desnetters", de-scribing their work experiences and projects around Finland with the help of photos and videos.
In 2015, we also continued our Ilme devel-opment programme, which aims at making our work and expertise visible at our work-sites and their surroundings. We also added social media channels to our communica-tions portfolio and have used them actively since autumn 2015. At the end of the year, we launched our renewed website, Destia.fi.
The aim of our external communications is to present Destia as an attractive, interesting and competitive company.
We want to create good relations with the media, and to help their representatives al-ways find the most knowledgeable experts for their enquiries.
Our bond issued in the summer was listed on the Helsinki Stock Exchange on 17 June 2015. As an issuer of a publicly-traded se-curity, we observe regular and constant duty of disclosure to a limited extent. At the same time we also created a new financial commu-nication policy.
This report, which combines annual and responsibility reporting, is our second cor-porate responsibility report under the G4 guidelines of the Global Reporting Initiative. We continue to further develop our respon-sible operations and corporate responsibility reporting.
READ MOREDisclosure policy for financial communications
26ANNUAL REPORT 2015
GRI CONTENT INDEX 2015Code GRI Standard Disclosures Reporting
GENERAL STANDARD DISCLOSURESStrategy and Analysis
G4-1 Statement from the most senior decision-maker of the organisation
CEO’s review
G4-2 Description of key impacts, risks and opportunities
Strategy and targetsOperating environmentDestia and the opportunities created by megatrends
Organisational Profile
G4-3 Name of the organisation Destia
G4-4 Primary brands, products, and ser-vices
Destia's business operations
G4-5 Report the location of the organisa-tion’s headquarters
Vantaa, Finland
G4-6 Number of countries where the or-ganisation operates, and names of countries where either the organisa-tion has significant operations or that are specifically relevant to the sus-tainability topics covered in the report
Destia's business operations
G4-7 Nature of ownership and legal form Management and Corporate Governance
G4-8 Markets served Destia's business operations
G4-9 Scale of the organisation Key figures
G4-10 Total number of employees by employment contract and gender
Total number of employees 31.12.2015: 1,492 (1,429)of which permanent 1,403 (1,354) and temporary 89 (75)of which full-time 1,424 (1,407) and part-time 68 (22)of which men 1,280 (1,213) and women 212 (216).Due to the business transaction with Mitta Oy 98 em-ployees from survey, drilling and laboratory services were transferred to Mitta Oy’s services as old employees on 1 January 2016.
G4-11 Percentage of total employees cov-ered by collective bargaining agree-ments
All Destia employees are covered by collective bargaining agreements, with the expection of those who based on their employer role are outside the agreements' scope.
G4-12 Organisation's supply chain Procurement and partnerships
G4-13 Significant changes during the report-ing period regarding the organisa-tion’s size, structure, ownership, or its supply chain
No significant changes.
G4-14 If and how the precautionary ap-proach or principle is addressed by the organisation
The precautionary approach is addressed according to leg-islation and contractor's requirements.
G4-15 Externally developed economic, environmental and social charters, principles, or other initiatives to which the organisation subscribes or which it endorses
Safety
Code GRI Standard Disclosures Reporting
G4-16 Memberships of associations and national or international advocacy organisations
Social participation and communications
Identified Material Aspects and Boundaries
G4-17 Entities included in the organisation’s consolidated financial statements or equivalent documents
Destia Group Plc is Destia Ltd’s parent company, which was established in connection with the ownership ar-rangement of Destia, and which owns 100% of Destia Ltd’s shares. The financial statements report on the finan-cial _development of Destia Group for 1 January 2015–31 December 2015. The comparative figures concerning the financial year are Destua subgroup's figures from the year 2014. As for Destia Group the comperative figures only exist from the third and fourth quarter of the year 1 July 2014–31 December 2014.
G4-18 Process for defining the report con-tent and the Aspect Boundaries
Destia complies with the Global Reporting Initiative, version G4, guidelines for core-level reporting. Corporate respon-sibility reporting is incorporated into Destia’s annual report. In addition, a GRI compilation has been carried out on the year 2015.
G4-19 Identified Material Aspects Destia and corporate responsibility
G4-20 Aspect Boundary within the organi-sation
Destia Group Plc
G4-21 Aspect Boundary outside the organ-isation
No data collected from outside Destia's organisation.
G4-22 Restatements of information provided in previous reports
No significant changes.
G4-23 Significant changes from previous reporting periods in the Scope and Aspect Boundaries
The report shows time series for several indicators, and no significant changes have taken place.
Stakeholder Engagament
G4-24 List of stakeholder groups engaged by the organisation
Customers and clients, owner, personnel, subcontractors and partners, infrastructure users, neighbours, authorities, decision-makers.
G4-25 Basis for identification and selection of stakeholders
Destia and corporate responsibility
G4-26 Approach to stakeholder engagement Destia is a Finnish infrastructure and construction service company that seeks to create a living environment that works better. Ethical guidelines and operating principles form the basis of our stakeholder engagement. Responsi-bility is part of Destia’s corporate culture. It also means up-holding high ethical standards in the activities of the com-pany’s Board of Directors, management, other employees and cooperation partners. Ethical activities are founded on Destia’s values, vision and strategy.Destia and corporate responsibility
G4-27 Key topics and concerns raised through stakeholder engagement
Destia and corporate responsibility
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Report Profile
G4-28 Reporting period Year 2015.
G4-29 Date of most recent previous report Destia's annual report 2014 was published on 3 March, 2015.
G4-30 Reporting cycle Yearly
G4-31 Contact point for questions regarding the report or its contents
G4-32 GRI content index GRI content index
G4-33 Policy and current practice with re-gard to seeking external assurance for the report
The corporate responsibility report has not been externally assured.
GOVERNANCEGovernance Structure and Composition
G4-34 Governance structure Board of Directors and its Committees
G4-35 Process for delegating authority for economic, environmental and social topics
Report of the Board of Directors (Financial Statements)
G4-36 Executive-level position(s) with re-sponsibility for economic, environ-mental and social topics
Destia and corporate responsibility
G4-38 Composition of the highest govern-ance body and its committees
Board of Directors
G4-39 Report whether the Chair of the high-est governance body is also an exec-utive officer
Board of Directors and its Committees
G4-40 Nomination and selection processes for the highest governance body and its committees
Board of Directors and its Committees
G4-41 Processes for the highest governance body to ensure conflicts of interest are avoided and managed
Board of Directors and its Committees
Highest Governance Body’s Role in Setting Purpose, Values, and Strategy
G4-42 Highest governance body's role in the development, approval, and updating of the organisation’s purpose, value or mission statements, strategies, policies, and goals
Board of Directors and its Committees
Highest Governance Body’s Role in Risk Management
G4-45 Highest governance body’s role in the identification and management of risks and opportunities
Risk Management
Code GRI Standard Disclosures Reporting
G4-46 Highest governance body’s role in reviewing the effectiveness of the organisation’s risk management pro-cesses
Board of Directors and its Committees
G4-47 Frequency of the highest governance body’s review of risks and opportu-nities
Risk Management
Highest Governance Body’s Role in Sustainability Reporting
G4-48 Approval of the sustainability report The corporate responsibility report is approved by Destia's CEO.
Remuneration and Incentives
G4-51 Remuneration policies for the high-est governance body and senior executives
Board of Directors and its CommitteesDestia’s CEO and Management Team
G4-52 Process for determining remuneration
Report of the Board of Directors (Financial Statements)
Ethics and Integrity
G4-56 Values, principles, standards and norms of behavior such as codes of conduct and codes
Destia’s values: Achieving goals fairly, boldly and skillfully.Destia's ethical guidelines (destia.fi/en)
G4-57 Mechanisms for seeking advice on ethical and lawful behavior
Destia's ethical guidelines (destia.fi/en)
G4-58 Mechanisms for reporting concerns about unethical or unlawful behavior
Destia's ethical guidelines (destia.fi/en)
SPECIFIC STANDARD DISCLOSURESDisclosures on Management Approach (DMA)
Generic Disclosure on Management Approach
Destia and corporate responsibility
ECONOMICEconomic Performance
G4-EC1 Direct economic value generated and distributed
Division of financial benefit by stakeholder group in 2015. Customers; 2015 revenue MEUR 462.8 (431.5), Suppliers; Materials and services from external subcontractors MEUR 324.7 (284.2), Personnel; Salaries and remuneration MEUR 71.5 (71.1), Public sector; Taxes and tax-like payments MEUR 0.5 (2.4), Pension and indirect personnel costs MEUR 16.7 (16.1), Investors; Financial costs MEUR 4.3 (5.7) and Investments; Gross investments MEUR 9.2 (8.0).
Procurement Practices
G4-EC9 Proportion of spending on local suppliers at significant locations of operation
Procurement and partnershipsIn the year 2015 the overall purchases totalled MEUR 320.5 (263.4) from which xxx were purchased from foreign suppli-ers. In the year 2015 1.5% (2.9%) of the overall purchases were purchased from foreign suppliers.
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ENVIRONMENTALMaterials
G4-EN1 Materials used by weight or volume Use of soil and aggregates 3.2 million tonnes in the year 2015 (2.9 million tonnes in 2014). Destia uses salt approx-imately 60,000–90,000 tonnes per year for preventing slip-pery and dusty conditions.
Energy
G4-EN3 Energy consumption within the organisation
Destia's own fules consumption 5.4 million litres in the year 2015 (5.5 million litres in 2014, 6.4 million litres in 2013, 7.4 million litres in 2012). Destia’s own electricity consumption 4,228 megawatts in the year 2015 (4,160 megawatts in 2014, 4,423 megawatts in 2013, 4,400 megawatts in 2012).Destia has an agreeement with Oulun Sähkönmyynti Oy, a company which focuses its electricity supply strongly on electricity produced by domestic and renewable raw mate-rials. Electricity supply from Oulun Sähkönmyynti is approx-imately as follows: Renewable energy sources (e.g. wood, biomass, water, wind) 20.4%, Fossil energy sources (e.g. peat, coal, natural gas, oil) 38.8%, Nuclear power 40.8%
G4-EN5 Energy intensity 421 gigajoule/turnover (MEUR) (453 gigajoule in 2014)
Biodiversity
G4-EN11 Operational sites owned, leased, managed in, or adjacent to, protected area(s) of high biodiversity value out-side protected areas
29 sites
Emissions
G4-EN15 Direct greenhouse gas emissions (scope 1)
Direct greenhouse gas emissions from Destia's own en-ergy consumption 14,820 tonnes in the year 2015 (15,039 tonnes in 2014).
G4-EN17 Other indirect greenhouse emissions (scope 3)
Carbon dioxide emissions from business travel 2,475 tonnes in the year 2015 (2,416 tonnes in 2014).
Effluents and Waste
G4-EN24 Total number and volume of signifi-cant spills
No significant spills.
Products and Services
G4-EN27 Extent of impact mitigation of envi-ronmental impacts of products and services
Environment
Code GRI Standard Disclosures Reporting
Compliance
G4-EN29 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations
Criminal charges have been brought against three Destia’s employees over environmental offences. The proceedings are based on the view that the employees are guilty of en-vironmental offences at the Harjula soil area in Mäntsälä between autumn 2010 and summer 2012. In addition, the prosecutor requests that Destia Ltd be set a corporate fine of at least 50 thousand euro and be ordered to lose the fi-nancial proceeds of crime, some 580 thousand euro. Destia denies the claims made. In summer 2012, on its own initia-tive the company informed the environmental authority that soil had by mistake been taken from outside the extraction area covered by the valid permit, but from property owned by the company. The environmental authority was notified immediately when the mistake had been detected. The environmental authority filed a request for investigation in January 2013.
Environmental Grievance Mechanisms
G4-EN34 Number of grievances about environ-mental impacts filed, addressed, and resolved thourgh formal grievance mechanisms
We collect feedback on environmental issues via our web-site and from our projects. In 2015 we received 25 feed-backs (30 in 2014) regarding Destia's operations and which required measures to be taken. The required measures have been started.
SOCIALLABOR PRACTICES AND DECENT WORK
Employment
G4-LA1 Total number and rates of new em-ployee hires and employee turnover by age group, gender and region
In the year 2015 Destia employed in average 1,505 persons (1,502 in 2014). Employee exit of permanent personnel was 9.1% (11.8% in 2014) and hiring rate was 12.7% (10.3% in 2014).Skilled and thriving Destia personnel
Labor/Management Relations
G4-LA4 Minimum notice periods regarding operational changes
Co-determination negotiations comply with the times defined in collective agreements and by law.
Occupational Health and Safety
G4-LA6 Type of inury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender
Safety
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Training and Education
G4-LA9 Average hours of training per year per employee by gender and by employ-ee category
During 2015 114 persons participated in strategic "Tosi-Toimi" trainings. 19% of them were female and 81% male. In total 391 persons participated in qualification trainings. 10% of them were female and 90% male.
G4-LA11 Percantage of employees receiv-ing regular performance and career development reviews
All Destia employees go through performance evaluation as well as performance and target review discussions.In year 2015, 87% of Destia employees had a performance and target review discussion with their superior.
Diversity and Equal Opportunity
G4-LA12 Composition of governance bodies and breakdown of employess per em-ployee category according to gender, age group, minority group member-ship, and other indicators of diversity
Destia's Board of Directors comprises of seven members, with one female member. The average age of members in the year 2015 was 51.6 years. In the year 2015 Destia's Management Team comprised of eight members, of which two were female. The average age was 48.1 years.Skilled and thriving Destia personnel
Labor Practices Grievance Mechanisms
G4-LA16 Number of grievances about labor practices filed, addressed, and re-solved through formal grievance mechanisms
1,108 safety observations were reported in year 2015. No violances against of ethical guidelines related to work-ing conditions were brought to internal audit's attention.
SOCIETYAnti-corruption
G4-SO3 Total number and percentage of op-erations assessed for risks related to corruption and the significant risks identified
All Destia's business and group units have reviewed Destia's ethical guidelines. No significant risks identified.
G4-SO4 Communication and training on anti- corruption policies and procedures
Review of the ethical guidelines is part of every Destia employees' familiarisation to work.
G4-SO5 Confirmed incidents of corruption and actions taken
No confirmed incidents of corruption
Public Policy
G4-SO6 Total value of political contributions by country and recipient/beneficiary
No political contributions paid.
Anti-competitive Behavior
G4-SO7 Total number of legal actions for anti- competitive behavior, anti-trust, and monopoly practices and their outcomes
No legal actions related to anti-competitive behavior, cartels and monopoly practices.
Compliance
G4-SO8 Monetary value of signicant fines and total number of non-monetary sanc-tion for non-compliance with laws and regulations
In the year 2015 there were no fines or non-monetary sanc-tions against Destia related to non-compliance with laws and regulations.
Code GRI Standard Disclosures Reporting
PRODUCT RESPONSIBILITYCustomer Health and Safety
G4-PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services
In the collected project feedback the result for the ques-tion "How safety aspects are considered in the project?" was 4.0 (4.0) on the scale of 1–5. There were no significant deviations from safety mentioned in the project feedback.
Product and Service Labeling
G4-PR5 Results of surveys measuring customer satisfaction
Customer satisfaction
Compliance
G4-PR9 Monetary value of significant fines for non-compliance with laws and regu-lations concerning the provision and use of products and services
In the year 2015 there were no significant fines for non-compliance with law and regulations concerning the use of products and services.
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DESTIA’S MATERIAL ASPECTS IN RELATION TO THE GRI G4 RESPONSIBILITY ASPECTSASPECT CONSISTENT WITH THE GRI G4 RELEVANT ASPECT FOR DESTIAECONOMIC RESPONSIBILITYEconomic Performance Profitable business operations
Procurement Practices Cooperation in the supply chainRealisation of services
ENVIRONMENTAL RESPONSIBILITYMaterials Environment
Energy Environment
Biodiversity Environment
Emissions Environment
Effluents and Waste Environment
Products and Services EnvironmentRealisation of servicesNew solutions and development of the field
Compliance EnvironmentSafetyRealisation of servicesEthical business operations
Environmental Grievance Mechanisms EnvironmentEthical business operations
ASPECT CONSISTENT WITH THE GRI G4 RELEVANT ASPECT FOR DESTIASOCIAL RESPONSIBILITYLabor practices and decent work
Employment Skilled and thriving Destia personnel
Labor and Management Relations Skilled and thriving Destia personnelInternal and external business communications
Occupational Health and Safety Skilled and thriving Destia personnelSafetyCooperation in the supply chain
Training and Education Skilled and thriving Destia personnelCooperation in the supply chain
Diversity and Equal Oppurtunity Skilled and thriving Destia personnel
Labor Practices Grievance Mechanisms Skilled and thriving Destia personnelEthical business operations
Society
Anti-corruption Ethical business operationsCooperation in the supply chain
Public Policy Participating in society
Anti-competitive Behaviour Ethical business operationsCooperation in the supply chainInternal and external business communications
Compliance Ethical business operationsCooperation in the supply chainInternal and external business communications
PRODUCT RESPONSIBILITYCustomer Health and Safety Safety
Realisation of services
Product and Service Labelling Customer satisfaction
Compliance Realisation of services
31ANNUAL REPORT 2015
DESTIA Neilikkatie 17, P.O.Box 206FI-01301 Vantaa, Finland
www.destia.fi/enTel. +358 20 444 [email protected]